Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19
What UK CPI, RPI and REAL INFLATION Predict for General Election Result 2019 - 5th Dec 19
Supply Crunch Coming as Silver Miners Scale Back - 5th Dec 19
Gold Will Not Surpass Its 1980 Peak - 5th Dec 19
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19
Will Labour Government Plant More Tree's than Council's Like Sheffield Fell? - 4th Dec 19
What the UK Economy GDP Growth Rate Predicts for General Election 2019 - 4th Dec 19
Gold, Silver and Stock Market Big Picture: Seat Belts Tightened - 4th Dec 19
Online Presence: What You Need to Know About What Others Know About You - 4th Dec 19
New Company Tip: How To Turn Prospects into Customers with CRM Tech - 4th Dec 19
About To Relive The 2007 US Housing Market Real Estate Crash Again? - 3rd Dec 19
How Far Will Gold Reach Before the Upcoming Reversal? - 3rd Dec 19
Is The Current Stock Market Rally A True Valuation Rally or Euphoria? - 3rd Dec 19
Why Shale Oil Not Viable at $45WTI Anymore, OPEC Can Dictate Price Again - 3rd Dec 19
Lib Dem Election Dodgy Leaflets - Sheffield Hallam Battle General Election 2019 - 3rd Dec 19
Land Rover Discovery Sport Brake Pads Uneven Wear Dash Warning Message at 2mm Mark - 3rd Dec 19
The Rise and Evolution of Bitcoin - 3rd Dec 19
Virtual games and sport, which has one related to the other - 3rd Dec 19
The Narrative About Gold is Changing Again - 2nd Dec 19
Stock Market Liquidity & Volume Diminish – What Next? - 2nd Dec 19
A Complete Guide To Finding The Best CFD Broker - 2nd Dec 19
See You On The Dark Side Of The Moon - 2nd Dec 19
Will Lib Dems Win Sheffield Hallam From Labour? General Election 2019 - 2nd Dec 19
Stock Market Where Are We?  - 1st Dec 19
Will Labour's Insane Manifesto Spending Plans Bankrupt Britain? - 1st Dec 19
Labour vs Tory Manifesto Debt Fuelled Voter Bribes Impact on UK General Election - 30th Nov 19
Growing Inequality Unrest Threatens Mining Industry - 30th Nov 19
Conspiracy Theories Are Killing This Nation - 30th Nov 19
How to Clip a Budgies / Parakeets Wings, Cut / Trim Bird's Flight Feathers - 30th Nov 19
Hidden Failure of SIFI Banks - 29th Nov 19
Use the “Ferrari Pattern” to Predictably Make 431% with IPOs - 29th Nov 19
Tax-Loss Selling Drives Down Gold and Silver Junior Stock Prices - 29th Nov 19
We Are on the Brink of the Second Great Depression - 29th Nov 19
How to Spot REAL Amazon Black Friday Bargains and Avoid FAKE Sales - 29th Nov 19

Market Oracle FREE Newsletter

UK House prices predicting general election result

Will Silver’s Surprising Summer Surge Continue?

Commodities / Gold & Silver 2019 Aug 30, 2019 - 08:40 AM GMT

By: MoneyMetals

Commodities

Just a few weeks ago, silver naysayers told us we’d have to wait months, or even years, before the market made a big move. Now they are eating their words!

The white-hot metal surged past $18.50/oz this morning to reach its highest level in more than two years.

Silver is up more than 13% in the month of August alone, a time when many precious metals analysts had expected summer doldrums. Even some long-term silver bulls became short-term bears. 

The widespread pessimism toward silver is totally understandable given its performance characteristics over the past few years. 



Like clockwork, rallies would stall out at resistance levels. Banks and other commercial traders playing the short side of the futures markets would always overpower the longs.

So when open interest on silver contracts on the COMEX rose significantly last month, it seemed that big institutional short sellers were set up to smash prices back down once again.

That’s certainly what long-term silver bull Craig Hemke of TF Metals Report expected.  “JP Morgan and Citi [are] making sure there’s no breakout,” he said on the July 19th Money Metals podcast.  “You've got to figure that trend is probably going to continue.” 

Hemke didn’t think silver would get above the “tremendous amount of bank created and technical resistance” at the $17 level. “That's why I think gold continues higher and silver continues mostly sideways maybe for another six to eight months,” he concluded.

Oops!

In fairness, nobody gets short-term to intermediate-term forecasts right 100% of the time. Our friend Craig Hemke has gotten a heck of a lot of things right over the years – and he most certainly wasn’t urging long-term investors to bail out of their positions. 

I fully believe that what we're seeing in gold, silver, and the mining shares is the beginning of what may evolve into the greatest metals' bull market in which you and I have ever participated. 

In the early 2000's, I stated my belief that, before the public-mania phase had been completed a number of years hence, we would see silver prices over $150 an ounce. 

This may sound hard to believe. 

The reality is this: Trying to trade precious metals market day to day or week to week is almost always a mistake. The trends that really matter occur over periods of months to years.

If you missed the opportunity to buy silver while it was still on the ground floor because you worried prices might sink into the basement, there are a couple good reasons not to fret. 

First, silver under $20/oz. is still an amazing bargain. It could double in price and still sit well below its all-time high of over $49/oz. Silver remains cheap versus stocks, bonds, and even gold. 

Second, the silver market may finally be due for a pause, if not a pullback. The weekly RSI momentum gauge is in extremely overextended territory, above 70, for the first time since 2016.

ilver Chart - 2016-2019

That doesn’t necessarily imply a heavy and prolonged pullback will follow like the one that occurred from 2016-2018. Having recently broken out from that consolidation phase and now exhibiting bull market characteristics, silver’s pullbacks are more likely to be sharp and short-lived.

The next upleg in silver will probably coincide with a major trend change in the gold:silver ratio. That ratio hit a quarter-century high above 92:1 earlier this year but has retreated dramatically in favor of silver in recent weeks, today under 83:1.

old/Silver Ration Chart 83:1

The ratio seems to trend around its 200-day moving average (the blue line in the chart), which has been pointing up in favor of gold since April 2017.

With the ratio today now having fallen well below the trend line, a confirmed reversal of the major trend in the gold:silver ratio could portend big things ahead for silver prices.

Silver, being the more volatile of the two precious metals, usually outperforms during bull markets. 

The naysayers harped on the fact that gold was outperforming through the first half of the year while some of the more virulent anti-silver bugs reiterated their misbegotten belief that silver isn’t money and won’t provide investors any safe-haven from trade wars or recession fears.

It’s true that silver’s biggest demand component is industrial. But in recent weeks the poor man’s gold has completely untethered from copper and other industrial metals that have continued to sink. 

Unlike ordinary base metals, silver can move dramatically based on the wild card of physical demand from investors.

Not surprisingly, silver coin sales sank during the 2016-2018 basing out period that left some silver bugs feeling worn out and cynical about the prospects of prices breaking through ceilings in rigged futures markets. 

As the legendary Sir John Templeton once said, “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.”

Fortunately for silver bulls, we’re a long way from euphoria.

Stefan Gleason is President of Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

© 2019 Stefan Gleason - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules